Bitcoin Forum

Now that bitcoin is called a currency by the government, can the sell btc's seized from raids?

After the trial I assume they can. They can sell a drug dealer car, right?  ???

Bitcoin is not called a currency by the government ;)

And yes, seized things are regulary auctioned

Most probably they would be auctioned off.

If they did sell,
How will they sell? By appointing meeting of all exchanges  ???

The process is called asset forfeiture.  Yes the distict attorneys office will need to make a case that the coins were part of the proceedes of a criminal enterprise.  If/when successful the assets (Bitcoins, gold, yatchs, real estate, priceless works of art, it doesn't really matter) becomes the property of the US treasury.   The DOJ routinely auctions of billions and billions of dollars of forfeited property each year.

FBI often gets named but they have nothing to do with the process.  The DOJ handles assets forfeitures in the US and any assets become the property of the US treasury (and indirectly the people of the United States collectively) until sold.


If you are talking about the Silk Road specifically understand the timeline is usually measured in years.  It is an insanely slow process.  Often property is destroyed (i.e vehicles rusted out, won't start, etc) because the process takes so insanely long.  Obviously Bitcoins aren't affected by time but if you are expecting a sale tomorrow you will be waiting a long time.

They will sell them using their regular auction process.  Should be a very interesting auction when it does finally happen.

They're waiting for the bitcoin worth $10,000. Profits!

I wrote an email to the DOJ explaining that bitcoin is about to crash to ZERO!! The email showed them how to sell me the coins for $100, so that they not left holding the bag.

Maybe they'll noob out, and panic sell their coins.  ;D

what if the persons wallet was encrypted and use did not give them the password?
Can they not only seize if they confiscate the pc/hardware? what if the back up was placed on to the cloud and a transaction was made on another pc?

They already moved them (so they have the keys).  Some are here:

http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX

The rest are here:

https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH

So, by moving the coins and consolidating them they have been shown to own them.

This may not be all of them but it is the BTC that the FBI has found so far.

Of course they can, why wouldn't they?

I think there are certain legal proceedings though.

http://www.forbes.com/sites/kashmirhill/2013/10/04/fbi-silk-road-bitcoin-seizure/

of course they can, why not? At least it will probably cost them more than they earn though, just because of the bureaucracy.

Lol if they do, let me know I'll help you to arrange for the fiat  ;D We'll partner up hehe

Really? I was told that btc is consided a currency by the us government.

Ha ha ha. Buy asant a you can and give them my email address... I'm willing to buy! ;D

No FinCEN stated that virtual currencies are regulated as a method of money transmission then never indicated they are considered a currency under US law.  In the Senate hearing it even came up "what is Bitcoin?  A commodity? A currency?  Something else?" and the experts did not provide an answer and FinCEN indicated that decision is outside of FinCEN's "scope".

Part of the issue is most US laws & regulations define currency as the money of the United States or a foreign nation which Bitcoin obviously is not.  Remember these laws were written when nobody considered the possibility of a currency that is neither the money of the United States, nor issued by any foreign government. 

Of course there are ways to keep the btc away from the government but for most of the time it's as easy as confiscating a laptop.

So bitcoins is just bitcoin? There is no classification for it?

great question

Yes although FinCEN has indicated that the exchanging of virtual currency for real currency is money transmission and those entities are regulated as money service businesses.  However this doesn't really classify Bitcoin rather it says "we regulate money service businesses and this is one form of it, just like gift cards, prepaid accounts, check cashing, etc are other forms of money service businesses". FinCEN kinda sidestepped the classification by saying it doesn't matter if it is a currency or not we still regulate it.  In the hearing they pointblank said that the authority to classify Bitcoin as a curency, or commodity, or something else does not lie with them but they will regulate it anyways.   AFAIK no other governmental agency or legislative body in the US has made any kind of definitive classification.  

I am sure it will eventually happen.  Germany has classified Bitcoin as a private money, a financial instrument.  Governments like boxes so they will either put it into a box, or make a new box as the idea of something outside of a box is horrifying to legislators.

They may wait to sell it cheaply under a crash, to try to undermine it.The profit is negligible, but then, so is that i guess..

What if some small foreign nation declare Bitcoin as native currency, the US Banks could buy/sell it and provide Bitcoin accounts I guess

You said that the government can regulate bitxoin... What exactly do they do?

I didn't say that. There is no "can" about it.

FinCEN has stated that exchanging virtual currency for real currency is a regulated activity so they already ARE regulating that activity.  As for what does that constitute?  Well that is a little off topic but generally speaking a money service business must:
a) register with FinCen
b) keep records on clients & transactions
c) implement an AML program
d) report suspicious transactions and other transactions over reporting threshold.

AML? And of course pay taxes. ;)

Holy crap the FBI has a lot.

If they sell the btc at market price right now, it will surely pay them back for the expenses of the investigation.

And then some... Probably the expenses for the whole year! ;)

I know.. seriously, FBI made bank busting Silk Road!  :D

The government should use the money to pay for its debts though, it has too much...

Ya but then again, if they sold all of it at the same time, btc would drop like crazy.

Yeah, that's true..

They should sell large amounts, a bit cheaper than market price, to big companies interested in investing in them.

They will just auction them off to the highest bidder.  It will be a very large purchase so start saving now and when the auction happens is a few years you will be ready to jump in with a bid!

Seriously, this would be biggest waste of the Bitcoins to pay very small fraction of debts...

Why? They owe a lot of money and they have a lot of money in bitcoins. If they sell all that they have, they would get millions paid off.

Why not split the BTC and sell separately, small buyers would be allowed to buy...

Im pretty sure they would also do that.

In the Texas case S.E.C vs Trendon Shavers (Pirateat40), his defense was that it wasn't really money, the S.E.C proves it was commodity based money and that he was spending it on goods and services!

http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539730583#.Un-nYiejN3U

Well even if they considered it like gold, it would be enough since gold can be traded.

The USA taxes barter trades (commodity swaps), this means, Bitcoin had to be legally recognized in the USA courts!

They can sell the proceeds of crime. They would have to brute force the password on the wallet first though.

Although they have another law for that, if you don't hand over you password when requested by a court, you get more jail time. God help those who are genuinely forgetful! ;)

Whats the difference between 10 years if you give password and say 15 years if you dont ? You will be out in 2/3 of jailtime anyway if your not problematic, so why give your Bitcoins to gov !

Ya especially if you own millions. I would just pass it on to a lawyer since they cant record whats going on between the person and a lawyer.

AFAIK both of the above accounts are owned by the FBI.  In other words the FBI has the private keys to these two accounts.

FBI should give the private keys to central bank, so US could get Bitcoin reserve for future.
United States pawns everything

My understanding is that they are required by law to sell seized assets at auction, but it would be interesting if they found a way to keep them for potential future value.  Either way, it will be interesting to see the eventual outcome, whether they offload them or become a speculator  :D

The problem I see with bitcoins is that, like all fiat money, their value depends on trust. As long as there are safer and/or more convenient alternatives, bitcoins are susceptable to panic selling and counterfeiting.

Bitcoins have no intrinsic value. They can be used for obtaining goods and/or services only as long as the providers will accept them.

I consider bitcoins to be "No-Penny Stocks" and predict that they will be subject to the same abuses as the penny stock market, and with less regulation.

Explain how.

Yeah the US needs money, so why not!

Whats funny is that people keep on donating to the addresses, and have a public note with advertisements! :D

Government agencies & financial institutions (at least in some Countries) are not allowed to 'dabble' or deal in bitcoins. Thus the only way they can 'play' the game is to seize.  8)